Corporate Affairs Director - Spencer Stuart

a seat at

the table

The growing influence of the corporate

affairs function in FTSE 100 companies

Spencer Stuart is one of the world¡¯s leading executive search

consulting firms. Privately held since 1956, Spencer Stuart

applies its extensive knowledge of industries, functions and

talent to advise select clients ¡ª ranging from major multinationals to emerging companies to nonprofit organisations ¡ª

and address their leadership requirements. Through 54

offices in 29 countries and a broad range of practice groups,

Spencer Stuart consultants focus on senior-level executive

search, board director appointments, succession planning

and in-depth senior executive management assessments.

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The growing influence of corporate affairs in FTSE 100 companies

The role and influence of corporate affairs in the UK¡¯s largest listed companies has continued to grow over recent years as CEOs and boards

alike recognise the critical importance of a well run function and the

value it can bring to the business. The accelerating change sweeping

through businesses is reflected in the broadening exposure, scope and

responsibilities of the corporate affairs function as well as in the financial

rewards available to high performers. As this report will demonstrate, the

corporate affairs leader who once played a largely advisory role has far

greater influence on the business today, as both protector and enabler.

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a seat at the table

A number of factors have led to a growing appreciation of the need for a

well-resourced, integrated and professional corporate affairs function ¡ª in

particular the increased focus by boards and senior executives on reputation and the need for careful tracking and management of reputational

risk. This awareness has been driven by a loss of confidence in multinational corporations and financial institutions, and the perception by the

public, media, politicians and the investment community that the underlying problems have been poorly handled. Furthermore, there has been an irreversible shift in transparency and complexity due to a number of factors:

rapid globalisation, increasing operational fragmentation, the immediacy

of information available through the internet, 24/7 news channels, ¡®citizen

journalism¡¯ and social media. A company¡¯s reputation can be affected by

issues that go well beyond the actions of its CEO or whether the company

has delivered shareholder value; a crisis in a local market can quickly escalate and have implications for the company¡¯s reputation on a global scale.

Having observed the changes taking place in the function from our vantage

point as advisers to boards, CEOs and corporate affairs directors, we decided to conduct some detailed research into the corporate affairs function in FTSE 100 companies. In particular, we explored the background,

experience and tenure of those in senior leadership roles, their status and

influence inside the organisation, and the scope and responsibilities of the

function. We also explored the correlation between each of these elements

and remuneration. For our research we conducted detailed interviews with

33 department heads from FTSE 100 companies, the majority of whom

operate in the FTSE 50.

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The growing influence of corporate affairs in FTSE 100 companies

The route to the top

The corporate affairs directors in our sample had an average of 17 years

experience in consultancy or in-house corporate communications; the longest-serving has 33 years experience and only five have less than 10 years.

This reflects that fact that companies are preferring to hire experienced

communications professionals rather than move internal candidates from

other areas of the business to work in senior-level communications roles.

Our research also indicates that a person¡¯s experience in the communications function carries a higher premium than whether or not they are an

industry insider. The two most common career backgrounds for corporate

affairs directors are media relations (42%) and government/public affairs

(32%), with a few coming from journalism (13%). Those with shorter

tenures in communications roles spent their earlier years in journalism,

economics, law, finance, investor relations or strategic planning.

¡°Everything starts with government relations as the business depends

on it. It is distinct from corporate communications and highly strategic.

75% of my CEO¡¯s time is spent with these contacts.¡±

There has been a marked increase in the number of high-level FTSE 100

appointees from government and public affairs backgrounds, particularly

in highly regulated industries where commercial success hinges on

regulatory alignment, public perception and a holistic approach to

Figure 1: Career background of FTSE 100 corporate affairs directors

Investor relations 3%

|

Other 10% ¡ª

¡ª Media relations 42%

Journalism 13% ¡ª

Public affairs 32% ¡ª

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